Argentina New Import Tax Imposed by Government
The Government of Argentina (GoA) has announced additional taxes on import transactions that require accessing the foreign exchange market as part of a package of measures aimed at staunching the outflow of Central Bank reserves and lowering its fiscal deficit.
In response to the agreement with the IMF, the Argentine Ministry of Economy announced new economic measures on July 25, 2023, that will increase the price of the U.S. dollar for savings and credit card purchases in U.S. dollars, impose higher import taxes on most products and services, and create a new preferential exchange rate to incentivize agricultural exports, primarily of corn and grains.
The establishment of this new tax includes the following elements affecting trade:
PAIS* Tax on Goods: In addition to existing import duties and taxes, a 7.5 percent tax will be applied to all imported goods, except:
(i) pharmaceuticals and firefighting materials, currently exempted by article 36 of Law 27,541;
(ii) luxury goods, which already pay a 30 percent tax; and
(iii) fuels, lubricants, and goods related to energy generation, as well as inputs and intermediate goods linked to the basic food basket, which will continue to be tax-exempt.
Taxes will initially be collected by banks when importers access the foreign exchange market, but they will not be applied if companies pay for their imports with their own dollars (i.e., outside of Argentina without accessing Argentine capital markets).
The tax will be applied to all imports, including those entering through Free Zones and the Tierra del Fuego Special Customs Area. However, temporary imports will not be affected if they are to be used to produce exportable goods. The government also specified that temporary imports covered by the scope of decrees 1330/2004 and 688/2002 pertaining to the automotive sector fall outside of the PAIS tax.
PAIS Tax on Services: A 25 percent tax increase will be applicable to all service imports, except:
(i) freight, to which a 7.5 percent rate will apply; and
(ii) health and education, exempted by article 36 of Law 27,541.
The PAIS tax on services is also in addition to preexisting taxes on foreign airline and other tourism services (which already pay a 107 percent rate), streaming entertainment (8 percent), and in-person entertainment services, such as music concerts (30 percent).
For questions on this issue or any general inquiries about Argentina’s current business climate, please contact the appropriate team member for CS Argentina listed on our website.
* PAIS is an acronym that stands for “for a more inclusive and caring Argentina” and should not be interpreted as the English translation of the word “country.”